The much maligned Shares for Rights scheme is back with a vengeance after being snuck back in by the coalition government, it has been revealed.

The scheme effectively allows employers to “sell” shares to employees, in exchange for important workplace rights, including redundancy payments, unfair dismissal, flexible working, time off for training and maternity leave, among others.

Employees would be offered shares in a company of at least £2,000 but would then not be able to pursue a claim against an employer in any circumstances.

As it stands, it is not clear what type of shares would be on offer to the employee and what the terms and conditions of those shares will be. Shares are subject to stock market fluctuations and can go up – or most likely – down, depending upon the economy and the assets which those shares are backed by. Problems could also arise if for example, directors stripped the assets and left the ‘shareholders’ with worthless shares that would invariably be less than the redundancy pay.

Another problem which critics have highlighted is that even shares which do result in a small amount of profit will be subject to tax and broker fees. This could result in a situation where an employee has no rights, no shares – and thanks to government cuts – no legal aid to resist mistreatment in the workplace.

But perhaps the biggest problem with this is the idea of rights being for sale. If rights are considered not as an inherent, fundamental principle but as something which can be discarded at will, it could very easily result in a situation where rights are considered a ‘privilege’ rather than a natural entitlement.

Forcing an employee to accept shares in return for rights in that sense, is akin to forcing someone to give up their rights to health and safety in the workplace in exchange for a lottery ticket. And indeed, some argue that is essentially what the scheme is: a lottery.

The initiative is a throwback to the fire-at-will policies of Adam Beecroft who proposed that smaller companies should be able to fire any of their employees for any reason and be effectively exempt from employment law.

His report was widely criticised at the time for lack of supporting evidence, but this new development will undoubtedly create further uncertainty for many employees who may be forced to accept these contracts in order to get or keep a job.

The controversial Employee Shareholder clause, 27, was originally announced by chancellor George Osborne in last year’s Autumn Statement, but was overwhelmingly voted down in the House of Lords last month.

But the House of Commons has overturned that ruling and reinstated the scheme.

The Trades Union Congress (TUC) has spoken out against the scheme and said that it “defies logic”. Its general secretary Frances O’Grady, said: “This proposal should have been quietly killed off. It has no support among employers and was heavily defeated in the House of Lords by a wide coalition including prominent Conservative and Liberal Democrat peers.

O’Grady added: “Employment rights should not be for sale. Employers do not want to buy them, and employees will not want to sell them. What is worse is that its only real practical use is as a tax dodge.”

Sarah Ozanne, employment partner at law firm CMS Cameron McKenna, has questioned Osborne’s agenda over pushing the scheme.

She said: “It’s curious as to why Osborne is so keen to press ahead with this when the consultation showed only lukewarm support for it, even among employers.

“There may be better support among start-ups but why employees would voluntarily surrender really quite fundamental rights is very unclear.”

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